The introduction of the Goods and Services Tax helped transform India’s taxation ecosystem. However, businesses have to do more than merely register under the new regime. To stay compliant and avoid paying penalties, companies also need to pay their tax liabilities and file their GST returns on time.
The Goods and Services Tax, better known as GST, is a tax imposed on industries related to manufacturing, sale and consumption of goods and services. Know more on Late Fees & Interest on GST Returns. It serves as a single tax substitute for various indirect taxes levied by the Indian government at the state and central levels. Under the GST regime, all registered taxpayers must furnish details regarding their income and sales to the concerned tax authorities via GST returns.
Failure to file such returns can result in late fees, penalties, and interest on gst returns on the liabilities due. Here’s a look at everything you need to about filing your GST returns on time and the benefits of doing so.
Importance of GST for Businesses
- Provides companies with an advanced IT platform for tax filing
- Puts an end to the hassle of paying and filing various individual taxes separately
- Eliminates the cascading effect of taxes by subsuming several indirect taxes
- Removes hidden costs and offers seamless tax credits
- Serves as a static tax-rate mechanism, ensuring tax uniformity across India
- Reduces logistics costs by eliminating restrictions on inter-state good movement
- Provides much-needed regulation to the unorganised sectors, such as construction and textile
GST Payment Due Dates for Taxpayers
Here is a quick look at the payment deadlines under the GST regime for various types of taxpayers.
| Sl No | Type of Taxpayer | Due Date for GST Payment |
| 1 | General | 20th day of the upcoming month |
| 2 | Composition Scheme | 18th day of the upcoming month |
| 3 | Non-Resident Indian | 20th day of the upcoming month |
| 4 | Input Service Distributor | 13th day of the upcoming month |
| 5 | TDS Deductor/TCS Collector | 10th day of the upcoming month |
Late Fees Charges Under GST
All registered entities must pay their tax liabilities on time and file two GST monthly returns twice every month and an annual return.
The government: https://services.gst.gov.in/services/login has designated due dates for filing the GST, as mentioned above. As per the chosen schedule, taxpayers can pay their GST dues, either every month or quarter, under the composition scheme. Failing this, the government charges a late fee depending upon the number of days delayed beyond the due date.
Individuals must pay these penalties in cash at the time of GST payment. Additionally, registered users cannot avail their Input Tax Credit through the electronic credit ledger for paying late fees. Late fee charges are also applicable to businesses filing a 0% or NIL GST. The GST portal will charge late fees for delay in filing the following returns:
- GSTR-3B
- GSTR-4
- GSTR-5 and GSTR-5A
- GSTR-6
- GSTR-8
- GSTR-7
- GSTR-9
Here’s a look at the late fee charges for all returns, namely, monthly, quarterly, and annual returns.
Our online GST calculator India provides quick and accurate GST calculations. Check it out now!
Returns Except GSTR-9 Annual Returns
A total late fee of INR 50 per day, with INR 25 credited to the Central Goods and Services Tax and INR 25 going to the State/Union Territory Goods and Services Tax. For interstate supplies, the late fee amounts to INR 50 per day under the Integrated Goods and Services Act, 2017. The maximum late fee limit as determined by the government is INR 5,000.
Delays in filing Nil returns will attract a late fee of INR 20 per day, with INR 10 credited to the CGST Act and the rest going to the SGST Act. Similar to other returns, interstate supplies will result in a late fee of INR 20 under the IGST Act.
Late Fee for Annual Returns
A total late fee of INR 200 per day (INR 100 CGST + INR 100 SGST/UTGST), wherein the maximum limit is 0.25% of the total annual turnover.
Taxpayers must pay all the late fee charges in cash separately for CGST, SGST and IGST via separate electronic cash ledgers. The GST portal automatically calculates and displays these values at the time of tax filing. Apart from the late fees, non-payment or delay in paying GST also attracts interest charges.
Interest Charges on Late Fee Payment
Any taxpayer who engages in the following activities is liable to pay interest charges.
- Pays GST after the due date
- Claims excess Input Tax Credit
- Reduces their output tax liability
Any tax paid after the due date attracts 18% interest, while excess ITC claimed and reduced liability attracts an interest of 24%. The calculation of the new liability based on these interest rates starts from the very next day of the due date. Hence, all business owners must pay their GST dues on time to avoid late fees and interest charges.
The Central Board of Indirect Taxes and Customs have decided to take strict action against non-filers of returns. In a recent meeting, the members suggested Cancelling the GST registration of individuals who have failed to file their returns for six or more return periods.
Rules Applicable of GST Payment for Taxpayers
GST (Goods and Services Tax) is an important taxation system in India, and understanding the rules applicable to GST payment for taxpayers is crucial for compliance. Here are the rules governing GST payments for taxpayers:
Modes of Payment
Taxpayers can make payments for GST, interest, penalty, and fee using various modes such as internet banking, credit card, NEFT (National Electronic Funds Transfer), or RTGS (Real Time Gross Settlement).
Crediting Electronic Cash Ledger
When a payment is made through the mentioned electronic modes, the amount is credited to the taxpayer’s electronic cash ledger. This balance can then be used to clear any outstanding interest, fee, or liability.
GST PMT-06 Form and Challan
Payments for GST are made using the GST PMT-06 form via challan. It’s important to note that the challan generated is valid for 15 days.
Challan Identification Number (CIN)
Upon successful payment, a Challan Identification Number (CIN) is generated. In case the CIN is not generated, the taxpayer can file Form GST PMT-07.
Online Fee Transfer Timing
Payments made online after 8 p.m. will be transferred to the taxpayer’s account on the next day.
Challan Generation
Physical challans are not approved for GST payments. Challans for all payments related to taxes, fines, penalties, and interest are generated exclusively on gst.gov.in.
Over-the-Counter Payments
Payments for challans below 10,000 rupees can be made over the counter using currency, cheques, or demand drafts through approved banks.
Digital Payments for Amounts Exceeding 10,000 Rupees
Payments exceeding 10,000 rupees are to be made only digitally, emphasising the digital shift in GST transactions for higher amounts.
Up-to-date List of Late Fee Notifications
GSTR-1
| Applicable Return Period | Late Fee Applicability | Notification Link |
| Starting from June 2021 for monthly filers | Maximum late fee is reduced. For those with no tax liability, a fixed late fee of ₹ 500 per return applies. For others, late fee is determined based on turnover slabs as explained in the section above. | 20/2021 |
| Starting from June 2021 for quarterly filers (QRMP taxpayers) | Maximum late fee is reduced. For those with no tax liability, a fixed late fee of ₹ 500 per return applies. For others, late fee is determined based on turnover slabs as explained in the section above. | 20/2021 |
| March 2020 – June 2020 and Quarters ending March 2020 and June 2020 | Late fee is completely waived if returns are filed before the specified dates in July-August 2020. | 53/2020 |
| March 2020 – April 2020 and Quarter ending March 2020 | Late fee is completely waived if returns are filed before the specified dates in June-July 2020. | 33/2020 |
| July 2017 – November 2019 | Late fee is completely waived for returns filed between December 19, 2019, and January 10, 2020. | 74/2019 |
| July 2019 | Late fee is completely waived for taxpayers in specific districts of flood-affected States and all districts of J&K. | 41/2019 |
| July 2017 – September 2018 | Late fee is completely waived. | 75/2018 |
| Starting from July 2017 | Late fee is reduced. | 4/2018 |
GSTR-3B
| Applicable Return Periods | Late Fee Applicability | Link to Notification |
| June 2021 onwards for monthly filers and quarter-ended June 2021 onwards for QRMP taxpayers | Maximum late fee reduced. For nil filers, it is fixed at ₹ 500 per return. For others, it is fixed as per turnover slabs, explained in the above section. | 19/2021 |
| July 2017 to April 2021 | Conditional waiver of late fee for delay in filing GSTR-3B. If filed between 1st June to 31st August 2021, maximum late fee charged at ₹ 500 per act per return. | 19/2021 |
| March and April 2021 for monthly filers; Jan-Mar 2021 for quarterly filers | Conditional waiver of late fee for delay in filing GSTR-3B. For turnover > ₹ 5 crore: No late fee for 15 days of delay. For turnover ≤ ₹ 5 crore: No late fee for 30 days of delay. | 09/2021 |
| May 2020 – July 2020 for turnover > ₹ 5 crore; February 2020 – July 2020 for turnover ≤ ₹ 5 crore | Maximum late fee capped at ₹ 500 per return filed after specified dates in notification 52/2020 but before 30th September 2020. Nil return not charged any late fee. | 57/2020 |
| February 2020 – April 2020 | Waived off completely if filed before staggered specified dates of June-July 2020. | 32/2020 |
| October 2018 onwards | Reduced late fee. | 76/2018 |
| July 2017 – September 2018 | Reduced late fee if filed beyond 31st Mar 2019. | 76/2018 |
| July 2017 – September 2018 | Completely waived if filed between 22nd Dec 2018 to 31st Mar 2019. | 76/2018 |
| October 2017 only | Completely waived for GSTR-3B submissions made but not filed due to a technical glitch. | 41/2018 |
| October 2017-April 2018 | Completely waived if filed before specified dates, and conditions satisfied. | 22/2018 |
| October 2017 onwards | Reduced late fee if filed before 22nd December 2018, and conditions satisfied. | 64/2017 |
| July 2017 – September 2017 | Completely waived if filed before 22nd December 2018, and conditions satisfied. | 28/2017 and 50/2017 |
GSTR-4 (Annual)
| Applicable Reporting Period | Late Fee Application | Notification Link |
| From FY 2021-22 Onwards | Late fee capped at a maximum of ₹ 500 per return for those with no filing and ₹ 2,000 for others. | 21/2021 |
GSTR-5
| Applicable Return Periods | Late Fee Applicability | Link to Notification |
| July 2017 onwards | Reduced Late fee | 5/2018 |
GSTR-5A
| Applicable Return Periods | Late Fee Applicability | Link to Notification |
| Returns for July 2017 onwards filed on or after 7th Mar 2018 | Full Late fee applicable | 13/2018 |
| July 2017 onwards | Reduced Late fee | 5/2018 |
GSTR-6
| Applicable Return Periods | Late Fee Application | Link to Notification |
| July 2019 | Completely waived for taxpayers in specific districts of flood-affected States and all districts of J&K | 41/2019 |
| Prior to January 2018 | Late fee completely waived off | 41/2018 |
| From July 2017 onwards | Late fee reduced | 7/2018 |
| No late fees for delayed filing of Nil return |
How to Deposit Late Fees with Government?
Depositing late fees with the government in compliance with GST regulations involves a straightforward process. When filing GST returns, the GST portal automatically calculates the applicable late fee based on the delay. The late fee is paid separately in cash for Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST), utilising separate electronic cash ledgers. It’s important to note that the GST return filing cannot be done without clearing the late fee dues.
The late fee for a particular month comprises not only the late fee for that month but also any late fees carried forward from the previous month due to a delay in filing the return. Additionally, it’s crucial to be mindful of timely GST payments as any non-payment or late payment of GST also attracts interest. By adhering to the prescribed procedures and ensuring the prompt deposition of late fees, businesses contribute to a smooth and compliant GST filing process, facilitating the effective functioning of the taxation system.
Interest Under GST & Calculation
Interest under the Goods and Services Tax (GST) is a crucial aspect of tax compliance, aiming to incentivise timely payments and discourage delays. It is applicable when taxpayers fail to pay their GST liability within the due dates or claim excess input tax credit, resulting in reduced output tax liability. The interest is calculated on the net tax liability after adjusting input tax credit claims.
For late GST payments (CGST, SGST, or IGST) after the due date, the interest rate is 18% per annum. In cases of excess input tax credit claimed or excessive reduction in output tax, the interest rate stands at 24% per annum. The interest is calculated from the day immediately after the tax was due.
To illustrate, if a taxpayer misses a tax payment of ₹ 10,000 due on 20th January 2021 and makes the payment on 20th February 2021, the interest for the delay period (31 days) is calculated as ₹ 10,000 * 31/365 * 18% = ₹ 153.
Timely tax payments and adhering to GST return due dates are essential to avoid incurring interest charges, emphasising the importance of compliance within the GST framework.
How Vakilsearch Can Help
Vakilsearch offers comprehensive GST packages that help businesses file their returns on time. Once you reach out to us, our representatives will schedule an appointment to better understand your business. We will then collect the required information and documents to maintain up-to-date records of your transactions. Our legal experts will draft your return statements, and after obtaining your permission will file them on your behalf. Say goodbye to your return-related woes with Vakilsearch by your side!
FAQs
What is the penalty and interest for late filing of GST return?
Penalty for late GST return filing incurs a maximum late fee of ₹ 500 per return for nil filers and ₹ 2,000 for others, with interest on delayed payments at 18% annually.
Is GST late fee and interest allowable in income tax?
GST late fee and interest are not allowable as deductions in income tax computation.
How to calculate interest on late payment of GSTR-3B?
Calculate interest on late GSTR-3B payment using the formula: Interest = Tax Amount × Interest Rate × Number of Days Delayed ÷ 100.
What are the consequences of not filing GSTR-1 and GSTR-3B?
Not filing GSTR-1 and GSTR-3B can lead to penalties, interest on delayed payments, and compliance notices from tax authorities.
Who is liable to file GSTR-3B monthly?
Any registered business or individual with a GST registration is liable to file GSTR-3B monthly.
What is Rule 59 in GST?
Rule 59 in GST pertains to the verification of documents and the manner of authenticating invoices.
Can GST late fees be waived?
GST late fees can be waived or reduced based on notifications and specified conditions provided by the government.
What is the maximum late fee for GSTR-1?
The maximum late fee for GSTR-1 is ₹ 200 per day of delay (₹ 100 CGST + ₹ 100 SGST) up to a maximum of ₹ 5,000.
Is it mandatory to file GSTR-3B monthly?
Yes, it is mandatory for eligible taxpayers to file GSTR-3B monthly, including nil filers or those with no business activity.
What is Rule 36 of GST?
Rule 36 of GST deals with input tax credit (ITC) utilisation and conditions for claiming ITC in relation to the outward supplies made by the supplier.
